Where’s the math supporting Apple’s rumored plus size iPhone?
February 2nd, 2013
A rumor originating on Chinese blogs of an oversized “iPhone Math” has been given new legitimacy in renderings that depict it as midway between iPhone 5 and iPad mini. But where’s the supporting evidence?
The first strike against “iPhone Plus” (or if you prefer a ridiculous machine translation, “iPhone Math”) is that it feeds upon two sources of strength: fan fiction renderings of what Apple “should” do (which are almost always 100% incorrect in every way) and the notion that Apple needs to follow the rest of the industry, particularly segments that are performing far worse than Apple itself.
Apple has, time after time, expressly not followed the trajectory of its competitors, seemingly even more so in cases where observers were expressing confidence that there was no possible way Apple could not bend its path to line up behind the rest of the industry.
Three times Apple followed the industry, but in original ways that caused massive disruption
In three cases over the last half decade, Apple has followed a popular industry trend (in some respects), but with a significant twist that appears to have given it far more successful than its peers.
For example, before the iPhone lots of people thought Apple should make a phone to prevent iPod sales from being eaten up by phones that could also play MP3s. But rather than just producing a simple phone with basic MP3 capabilities (as Motorola did in its iTunes partnership), Apple blew the industry away with an advanced software platform running on a mobile device, capable of running a real browser, hardware accelerated animation and video and advanced mobile apps that happened to also include iPod features far beyond the current crop of iPods.
Similarly, as the rest of the industry was gearing up for mass production of netbooks, observers insisted that Apple too needed to get on this bandwagon. Instead, Apple delivered the iPad, which has many of the characteristics of a netbook (high mobility, lower cost, simplicity), but taken to a whole new level, rethinking everything about what a mobile computing device should be.
A third example: while observers were insisting that Apple needed to match the low end, cheap mini-tablets being offered by Amazon, Google and Samsung, Apple instead came out with a premium device that packed a full size iPad 2 resolution into a super thin, smaller form factor that is more compact than existing 7″ tablets, but offers more screen real-estate and the ability to run real tablet apps.
Apple rarely follows the herd without incorporating big, fundamental shifts in its direction and approach. You might call this “following the herd as a predator.”
At the same time, it doesn’t just do the opposite of its competitors (like Samsung and its sudden affection for the stylus Apple rejected); beating the rest of the market requires applying the right mix of art and science to discover what the true needs are and how to solve them in creative ways.
Fan fiction offers the opposite of evidence
While Apple’s competitors seem to be short on the art side, fan fiction inventions often come up short on the science side. There’s nothing inherently wrong with fan fiction style speculation. I’ve been guilty of it myself. But the more elaborate the rendering, the more likely it is to be wrong.
Knowing where the tech industry is headed has very little to do with being able to design something that looks cool in a photo. There are very real constraints on what will sell (profitably, in a given volume) and what is possible to accomplish (given those sales constraints), and fan fiction renderings almost never take any of these into consideration because, well, the constrains of reality are a bummer when you’re dreaming up new ideas.
Developing a successful product has more to do with “boring” things like being able to source components and build reliable software (that is so sophisticated that it appears simple) than it has to do with imagineering “cool looking” futuristic stuff.
That’s why people are always so unimpressed when Apple delivers one of its blockbuster products that will go on to change the world. The tech media and their pundit friends are always instead hoping for an impossibly unworkable and complex mystery to contemplate, not a straightforward, obvious and simple answer to a broad problem.
Geeks had no respect for the iPod and they all collectively yawned when the iPad was unveiled. I know, I was there. CNET wasn’t even interested in airing my interview because I wasn’t echoing the majority opinion at the time that said it just was not very exciting and didn’t seem to have much potential.
But geeky tech people are usually wrong about the market. Just look at the string of disasters Google has foist upon the world. Google IO should be pronounced “uh oh,” if only for the reason that it introduces impossibly unworkable and complex mystery products every year, nearly all of which have failed dramatically, from 2009’s Google Wave to Google TV in 2010, Android 3 Honeycomb and Chrome OS in 2011 and Google + and the Nexus Q in 2012.
Imagine how well Apple would be doing if it had released a string of failures every year. Almost reminds one of Microsoft from the previous decade, when the exact same series of geeky, impossibly unworkable and complex mystery products appeared every year to cheering developers at CES, only to fail and fade into forgotten obscurity.
Essentially, the more an idea has the seal of approval from the geek technorati, the less likely it is to be a viable product for the mass market.
Take netbooks: they were supposed to be the answer to everything wrong with the PC. Problem is, they were a poor approach to solving the existing problems of the PC, introducing at least as many new problems as they intended to solve.
Netbook 2: This time it’s a bigger phone
Several months of netbook sales helped to “prove” that netbooks were the future, just a few months before the market for netbooks collapsed entirely. People today are similarly are viewing super sized screens as an unquestionable trend in smartphones. And like netbooks in 2008, pundits are insistent that Apple has to deliver one.
There are a couple problems with this idea. The first is that despite some sales, there’s no evidence that super big smartphones are selling in volumes that can support profitability, or that there is significant specific demand for big screens.
We know that Samsung sells the most of these big screen smartphones, but Samsung’s profitability is half that of Apple, largely because it sells lots of low end cheap phones. That’s not intentional; Samsung would desperately like to sell more premium models and earn Apple-like profits. That’s why it embarked on a plan to duplicate the iPhone 3GS in 2010. This worked out pretty well for Samsung, but it still hasn’t been able to copy Apple close enough to duplicate its profitability.
Samsung has bet on big screens to drive its phone portfolio into premium territory (or at least induce sales of more expensive models). But Samsung has also bet on the stylus and OLED screen technology. There’s really no evidence consumers really want any of these things. They are not driving some new tide of demand. They’re just occurring at the same time that Samsung is expanding its sales. Other phone makers also adopted big screens and styli and OLED screens without finding major markets for their phones.
In fact, you could say the same thing of Android: Samsung’s success is not because of selling Android phones, it has come in spite of it. There’s all sorts of examples of companies that are failing despite a big bet on Android, the best being Google’s own Motorola subsidiary, one of the few manufactures to have backed Android exclusively.
So just as Android, styli and OLED screens aren’t really driving phone demand (certainly not in the way that iOS or features like Siri clearly is in every market and on every carrier), there’s no real evidence that oversized screens are driving demand or in demand by the public.
If big phones are really in demand, why is Samsung’s most popular US phone the 4.8 inch Galaxy IIIS, rather than one of its bigger phones like the 5.6 inch Note II? Samsung’s second most popular phone in the US isn’t a Note, it’s the IIS, which has a smaller 4.3 inch screen. And both of those phones were still less popular than iPhone 5 and its 4 inch screen.
Apple’s top selling phone is always its fastest, it offers the best camera, and delivers the nicest screen. These are clearly things people want and will pay extra for. But Samsung’s most original feature is a really big screen, a feature that isn’t driving its profits or popular sales. The majority of Samsung’s customers are opting for cheap phones, not big ones.
Why are Samsung’s phones big?
If the market really wants bigger phones, why doesn’t it want Samsung’s biggest phones? There does not seem to be any direct correlation between huge screen size and overall demand. There is, however, a correlation between phone size and both first generation LTE chipsets and large batteries.
I don’t think Samsung asked its designers to create a smartphone size that would sell well. I think Samsung asked its designers to package a huge bunch of components into a smartphone product, and the only answer was “a big smartphone.”
I’m not saying there aren’t any people who want a phone with a big, even huge, oversized screen. But the market does not seem to be revealing real unit-moving demand for smartphones with big screens, in the same way there truly is a clear demand for big HDTVs or big roomy vehicles for families (at least in the USA, where gas is cheap). People pay significantly more for bigger TVs, and that demand is driving sales volumes toward ever larger screens. Nobody seems to be willing to pay a premium for really big screen phones.
I compare big screen smartphones to netbooks because I think both are poor approaches that can only remain popular until something better comes along. Just as netbooks took the good idea of an affordable, small notebook and exaggerated it into absurdly crappy, low performing devices that were too small to use, oversized smartphones take the idea of easy to read mobile devices and exaggerate them into big, heavy and expensive devices that threaten their own mobility.
This has gotten so out of hand that HTC has come up with a solution for the oversized smartphone: a small companion handset that links to the big device via Bluetooth so you can place calls without wearing out your forearm or looking ridiculous holding a pizza sized phone to your face.
Samsung has spent billions of dollars telling people that they need a big screen (among other things, to play games). But Samsung’s product mix isn’t tilting toward its phablet line. It’s trending toward the devices most like the iPhone.
Mobility trumps screen size
Even in general terms, while bigger is often better (especially in screen display sizes), mobility trumps screen size. Look at notebooks. Apple introduced the 17 inch PowerBook almost a decade ago as a workstation replacement, offering the biggest screen ever on a notebook. However, it’s now gone, replaced by MacBooks with screens that have trended smaller, not larger, now in the range of 11 to 15 inches.
Apple’s 17 inch MacBooks had really nice displays that showed a lot of desktop, but they were so heavy that they weren’t very mobile. Demand quickly shifted toward lighter models with smaller screens.
And while desktop iMacs keep getting bigger screens, the most popular computers Apple now sells are (by far) iPads. And Apple’s iPads–almost entirely a screen–are also trending smaller, not larger. The reason behind this isn’t that small screens are so much cheaper; it’s because devices with smaller screens can be much lighter and thinner. The new iPad mini promises to be more popular than the original just because it’s more mobile.
Of course, Apple’s iPhone 5 and iPod touch got bigger screens last year, but those screens aren’t big enough to make them noticeably less mobile. In fact, the new devices are actually lighter and equally pocketable. The question remains: how much bigger can iPhones get without sacrificing their mobility?
How do you SKU?
It’s also noteworthy that Apple didn’t release two iPhone 5 models, one with a 4 inch screen and one with the smaller screen of the iPhone 4S. Apple bundled the iPhone 5’s features into a single package: LTE, faster chips, better camera and a taller screen. It would be unprecedented for Apple to offer a new iPhone with nothing else but a bigger screen.
Twice before, with the iPad and MacBook Air, Apple trended smaller when introducing a new version, not larger. And the motivation both times was mobility. And in both cases, Apple appeared to have read market demand correctly.
It’s notable that Apple didn’t go the other direction, offering an even smaller iPod touch, a smaller iPhone, a smaller MacBook Air or en even smaller iPad mini. There are competing products that have tried to offer smaller alternatives, such as the Palm Pixi, netbooks with 9″ screens, and 5-7″ tablets. None of those have been very successful. So there’s clearly a sweet spot between too big and too little.
Now, it might make sense for Apple to offer a big screen 5″ iPhone. But the tradeoffs are significant. It would complicate production, as Apple would be adding a size option to its existing choices of 2 colors, 3 capacities and 3 carriers types. Rather than having just one new model of iPhone 5, it would double Apple’s model matrix from 18 SKUs to 36.
This would complicate everything from production to inventory forecasting and management. Sure, Samsung and others do this, but they also aren’t half as profitable as Apple. One of the keys to Apple’s profitability is that it exercises restraint in the number of different models it offers. For Apple to greatly expand its offerings would require a clear new benefit that would directly enhance sales.
Think about different
Consider how the choices in products Apple currently offers serves to generate significant new sales. Colors of iPods? Apparently this results in far more sales or Apple wouldn’t continue doing it. Multiple screen sizes of iPad and MacBook Air? A clear opportunity to sell lots more by targeting demands for both higher mobility and larger screens. But offering two iPhone 5 models with slightly different screen sizes?
Consider that Pad mini has a screen that’s 41% of a full sized iPad. In contrast, a 4-inch iPhone 5 would be about 68% the size of a 5″ version. There’s much less difference. The iPad mini is much smaller and therefore much more mobile. A slightly larger iPhone 5 wouldn’t offer nearly as much differentiation.
The iPhone 5 is similarly just slightly larger than iPhone 4 (which delivers 85% of the new 4 inch screen), but that screen size isn’t the sole attraction of iPhone 5 (the way a larger, 5 inch iPhone 5 would be). There’s a clear reason why Apple didn’t release iPhone 5 in both old and new sizes – there would be zero interest in a slightly smaller screen, and it would cost about the same (if not more) to make, and would involve expensive design work.
What’s the upside to creating a slightly larger iPhone 5: attracting buyers who want a slightly bigger screen? In order to really entice anyone with screen size, you’d need a substantially bigger screen. To offer the same differentiation that iPad mini does for the full sized iPad, you’d need a stupidly big iPhone.
Why not just put phone features on the iPad mini?
Rather than trying to address an audience of buyers (that are not even proven to exist) by offering a slightly larger iPhone 5 model that looks just like a Samsung device, if Apple wanted to give buyers more options it might be better off just adding full phone capabilities to iPad mini.
Rather than offering just a WiFi and 3G/LTE data version, Apple could add full telephony support with a phone version it could sell on contract. There may actually be a market for users who would like a mobile iPad that could support phone calls and its own phone number, both among consumers and in the Enterprise.
This iPad mini would cost slightly more than a standard iPad mini but that extra cost could be hidden by contract subsidies. The result would be turning the iPad mini into an Super iPhone model, sort of the reverse of the iPod touch’s relationship with the standard iPhone. Apple wouldn’t have to design an entirely new product, just modify an existing one.
That’s important because attracting a new fringe of the market might not be valuable enough to justify the expense of developing a second set of 18 iPhone 5 SKUs. Additionally, a iPad mini that works as a phone would be sufficiently differentiated from the conventional iPhone 5 to prevent making it look less valuable or attractive. A slightly bigger iPhone 5 would call into question why Apple would carry a slightly smaller version.
There may actually be a significant audience that would like to have an iPad mini and a phone, but can’t afford the duplication and overlap of carrying both. Such a “Super iPhone” would be significantly differentiated from iPhone 5 in that it could run full sized iPad apps and games. That’s something today’s Android “phablets” don’t really offer, because there aren’t really any tablet Android apps of significant value.
In contrast, a 5″ version of iPhone 5 could only run existing iPhone apps, just slightly bigger. By leaping beyond Samsung’s obese phones that it was forced to make as a concession to less space efficient components and design, Apple could sell a differentiated, iPad phone product that could have minority appeal alongside its conventional iPhone 5, an option that might likely be attractive to business people, gamers and those with visual handicaps.
Perhaps Apple could call it the “iPad mini DED,” for digital entertainment device, of course.